Metric guide · Revenue
ARPU: average revenue per user
Short answer
ARPU, or average revenue per user, is the revenue earned per paying user in a period. Sondola calculates it as revenue in the period divided by the number of paying users in that period. Some teams divide by all active users instead, so always check which denominator a quoted ARPU uses.
The formula
ARPU = revenue in period ÷ paying users in period
Unit: US dollars. Better when it goes up.
How to calculate it
- Take net revenue for the period from your billing system, after refunds.
- Count paying users in the same period, using the average of the start and end counts if the base changed a lot.
- Divide revenue by paying users.
- Use the same period length every time, since monthly and annual ARPU differ by roughly a factor of 12.
Mistakes that distort it
Dividing by all active users, including free users, gives a much lower figure than dividing by paying users. State which one you use.
If revenue is cash collected, a month with many annual renewals shows a high ARPU. Use normalized MRR divided by paying subscribers for a steadier view.
Gross ARPU and net ARPU can differ substantially. Keep the same basis across periods.
Where Sondola reads it from
Sondola reads this metric from Stripe, RevenueCat and Paddle, with the source and period on every reading. Each reading keeps where it came from, the period and the date it was recorded, and you can download all of it at any time.
See all 34 integrations →Questions
What is the difference between ARPU, ARPPU and ARPA?
ARPPU is revenue per paying user, which matches Sondola's ARPU definition. Elsewhere ARPU often divides by all users. ARPA divides by accounts, which suits B2B products where one account holds many users.
Does a price increase always raise ARPU?
Not necessarily. If more users choose cheaper plans or discounts at the same time, ARPU can stay flat or fall.
Related metrics
Written by the Sondola team. Benchmarks name their source, basis and date. Changes to how Sondola counts a number are on the corrections page.
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